The Trump administration is reportedly considering a new policy that would impose tariffs on U.S. semiconductor manufacturers failing to meet a specified domestic production ratio, according to The Wall Street Journal, citing anonymous sources. This initiative represents the administration's latest effort to boost semiconductor output within the United States.
Under the contemplated policy, U.S. semiconductor companies would be mandated to produce a volume of chips domestically equivalent to the volume their customers import from overseas manufacturers. Non-compliance with this "1:1 ratio" would trigger tariffs, though the Wall Street Journal report did not specify a timeline for achieving this target.
This reported deliberation follows President Donald Trump's earlier statements in August regarding the imposition of tariffs on the semiconductor industry. While the proposed ratio-based approach aims to bring semiconductor manufacturing back stateside, sources familiar with the matter suggest it carries the "potential to initially strain the U.S. chip industry" until domestic manufacturing capacity significantly scales to meet existing demand.
Establishing large-scale domestic chip manufacturing plants is a substantial and protracted undertaking. For example, Intel's manufacturing facility in Ohio, initially slated for an earlier opening, has faced multiple delays and is now targeting a launch in 2030. These delays highlight the complexities and capital intensity involved in expanding U.S. semiconductor fabrication capabilities.
In a related development, Taiwan Semiconductor Manufacturing Company (TSMC) announced in March a commitment of $100 billion over four years for building infrastructure to support chip production plants in the U.S. Details surrounding the operational specifics of these facilities remain limited. The consideration of a tariff policy aligns with the administration's stated objective to enhance domestic semiconductor production and reduce reliance on overseas manufacturing.
